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Press Release
First Industrial Realty Trust Reports Fourth Quarter and Full Year 2015 Results
Full year 2015 FFO was
"2015 was another very successful year for the
Portfolio Performance – Fourth Quarter 2015
- In service occupancy was 96.1% at the end of the fourth quarter, compared to 95.5% at the end of the third quarter of 2015, and 94.3% at the end of the fourth quarter of 2014.
- Tenants were retained in 89.1% of square footage up for renewal.
- Same property cash basis net operating income (NOI) increased 5.1%. Including lease termination fees, same property NOI also increased 5.1%. Both measures exclude the impact of the
$0.4 million portion of a one-time restoration fee recognized in the fourth quarter of 2014. - Rental rates increased 5.0% on a cash basis and increased 17.2% on a GAAP basis; leasing costs were
$1.97 per square foot.
Common Stock Dividend Increased
The board of directors declared a common dividend of
"On the strength of our performance in 2015 and our outlook and business plan for 2016, we increased the first quarter dividend by 49%," said
Investment and Disposition Activities
In the fourth quarter, the Company:
- Acquired a two-building portfolio in the I-95 North Corridor of the
Baltimore/Washington DC market for$61.9 million , comprised of a 644,000 square-foot distribution center which is 100% leased on a long-term basis and a 349,000 square-foot facility in lease-up. - Acquired a two-building, newly completed development in the Southeast submarket of
Houston for$25.1 million that is 41% leased. - Acquired a 100% leased, 80,000 square-foot facility in
Dallas for$6.9 million . - Placed in service four buildings comprised of 666,000 square feet, 85% leased on average, with total estimated investment of
$49.5 million . - Started a build-to-suit development totaling 402,000 square feet in
Atlanta , with estimated investment of$23.3 million . - Sold 51 buildings comprising 2.8 million square feet plus two land parcels for a total of
$108.3 million .
For the full year 2015, the Company:
- Acquired eight buildings totaling 1.9 million square feet and five land parcels for a total investment of
$169.2 million . - Placed in service seven buildings, 95% leased on average, totaling 1.8 million square feet with an estimated total investment of
$109.2 million . - Sold 66 buildings totaling 3.8 million square feet and four land parcels for a total of
$158.4 million .
In the first quarter of 2016 to date, the Company:
- Started a 63,000 square-foot redevelopment project in the
South Bay submarket ofLos Angeles , which is pre-leased on a seven-year basis, on the site of a Company-owned 162,000 square-foot asset that is being demolished, with an estimated investment of$17.6 million . - Acquired a 100% leased, 126,000 square-foot distribution center in
Orlando for$9.3 million . - Bought an 11-acre development parcel in the Inland Empire for
$1.7 million . - Sold a 154,000 square-foot building in
Chicago for$5.1 million
"Throughout 2015, we used our platform to invest in high quality developments and acquisitions with attractive long-term cash flow growth prospects using our valuable platform," said
Outlook for 2016
Mr. Duncan stated, "In 2016, we are focused on making further progress on capturing our cash flow growth opportunities to create value for shareholders. We can do so through the built-in contractual rental rate increases in our leases, lease up of developments and value-add acquisitions, pushing rental rates higher, as well as lowering leasing and capital costs."
Low End of |
High End of |
|||||
Guidance for 2016 |
Guidance for 2016 |
|||||
(Per share/unit) |
(Per share/unit) |
|||||
Net Income Available to Common Stockholders |
0.38 |
0.48 |
||||
Add: Real Estate Depreciation/Amortization |
1.03 |
1.03 |
||||
FFO (NAREIT Definition) |
$1.41 |
$1.51 |
The following assumptions were used:
- Average quarter-end in service occupancy of 95.0% to 96.0%. First quarter occupancy may decline by approximately 100 to 125 basis points from year-end 2015 levels due to the typical higher levels of lease rollovers experienced annually in the first quarter as well as a 400,000 square-foot moveout in the Company's lone
Memphis asset. - Same-store NOI on a cash basis before termination fees of positive 3% to 5% for the full year.
- General and administrative expense of approximately
$25 million to $26 million . - Guidance includes the incremental costs related to the Company's developments under construction as of
December 31, 2015 and the aforementioned redevelopment inLos Angeles commenced in the first quarter of 2016. In total, the Company expects to capitalize$0.01 per share of interest related to these projects in 2016. - Guidance reflects the first quarter 2016 payoffs of
$160 million of 5.75% unsecured notes and$58 million of secured debt with an interest rate of $7.75%. - Other than the above, guidance does not include the impact of:
- any other future debt repurchases prior to maturity or future debt issuances,
- any future investments
- the
$150 million to $200 million of projected property sales, nor any other future property sales, - any future impairment gains or losses,
- any future NAREIT-compliant gains or losses, or
- any future equity issuance.
A number of factors could impact our ability to deliver results in line with our assumptions, such as interest rates, the economy, the supply and demand of industrial real estate, the availability and terms of financing to potential acquirers of real estate, the timing and yields for divestment and investment, and numerous other variables. There can be no assurance that
FFO Definition
About
Forward-Looking Information
This press release and the presentation to which it refers may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on certain assumptions and describe our future plans, strategies and expectations, and are generally identifiable by use of the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "project," "seek," "target," "potential," "focus," "may," "will," "should" or similar words. Although we believe the expectations reflected in forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that results will not materially differ. Factors which could have a materially adverse effect on our operations and future prospects include, but are not limited to: changes in national, international, regional and local economic conditions generally and real estate markets specifically; changes in legislation/regulation (including changes to laws governing the taxation of real estate investment trusts) and actions of regulatory authorities; our ability to qualify and maintain our status as a real estate investment trust; the availability and attractiveness of financing (including both public and private capital) and changes in interest rates; the availability and attractiveness of terms of additional debt repurchases; changes in our credit agency ratings; our ability to comply with applicable financial covenants; our competitive environment; changes in supply, demand and valuation of industrial properties and land in our current and potential market areas; difficulties in identifying and consummating acquisitions and dispositions; our ability to manage the integration of properties we acquire; potential liability relating to environmental matters; defaults on or non-renewal of leases by our tenants; decreased rental rates or increased vacancy rates; higher-than-expected real estate construction costs and delays in development or lease-up schedules; changes in general accounting principles, policies and guidelines applicable to real estate investment trusts; and other risks and uncertainties described under the heading "Risk Factors" and elsewhere in our annual report on Form 10-K for the year ended
A schedule of selected financial information is attached.
The Company's fourth quarter and full year 2015 supplemental information can be viewed at www.firstindustrial.com under the "Investors" tab.
FIRST INDUSTRIAL REALTY TRUST, INC. |
||||||||
Selected Financial Data |
||||||||
(Unaudited) |
||||||||
(In thousands except per share/Unit data) |
||||||||
Three Months Ended |
Twelve Months Ended |
|||||||
December 31, |
December 31, |
December 31, |
December 31, |
|||||
2015 |
2014 |
2015 |
2014 |
|||||
Statement of Operations and Other Data: |
||||||||
Total Revenues |
$ 93,207 |
$ 90,333 |
$ 365,762 |
$ 344,599 |
||||
Property Expenses |
(28,966) |
(30,000) |
(114,628) |
(114,499) |
||||
General and Administrative |
(6,336) |
(5,476) |
(25,362) |
(23,418) |
||||
Acquisition Costs |
(1,039) |
(849) |
(1,403) |
(960) |
||||
Impairment of Real Estate |
- |
- |
(626) |
- |
||||
Depreciation of Corporate FF&E |
(168) |
(138) |
(688) |
(526) |
||||
Depreciation and Other Amortization of Real Estate |
(28,707) |
(28,323) |
(113,126) |
(111,371) |
||||
Total Expenses |
(65,216) |
(64,786) |
(255,833) |
(250,774) |
||||
Gain (Loss) on Sale of Real Estate |
35,822 |
(83) |
48,906 |
(83) |
||||
Interest Income |
2 |
56 |
61 |
2,110 |
||||
Interest Expense |
(17,745) |
(16,886) |
(67,424) |
(72,178) |
||||
Amortization of Deferred Financing Costs |
(868) |
(738) |
(3,159) |
(3,098) |
||||
Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements |
- |
- |
(11,546) |
- |
||||
Loss from Retirement of Debt |
- |
- |
- |
(655) |
||||
Income from Continuing Operations Before Equity in (Loss) Income of Joint Ventures and Income Tax Benefit (Provision) |
45,202 |
7,896 |
76,767 |
19,921 |
||||
Equity in (Loss) Income of Joint Ventures (a) |
(6) |
(9) |
55 |
3,499 |
||||
Income Tax Benefit (Provision) |
10 |
(46) |
(117) |
(238) |
||||
Income from Continuing Operations |
45,206 |
7,841 |
76,705 |
23,182 |
||||
Discontinued Operations: |
||||||||
Income Attributable to Discontinued Operations |
- |
193 |
- |
1,835 |
||||
Gain on Sale of Real Estate |
- |
11,505 |
- |
25,988 |
||||
Income from Discontinued Operations |
- |
11,698 |
- |
27,823 |
||||
Net Income |
45,206 |
19,539 |
76,705 |
51,005 |
||||
Net Income Attributable to the Noncontrolling Interest |
(1,706) |
(758) |
(2,903) |
(1,895) |
||||
Net Income Attributable to First Industrial Realty Trust, Inc. |
43,500 |
18,781 |
73,802 |
49,110 |
||||
Preferred Dividends |
- |
- |
- |
(1,019) |
||||
Redemption of Preferred Stock |
- |
- |
- |
(1,462) |
||||
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities |
$ 43,500 |
$ 18,781 |
$ 73,802 |
$ 46,629 |
||||
RECONCILIATION OF NET INCOME AVAILABLE TO FIRST INDUSTRIAL REALTY TRUST, INC.'S COMMON STOCKHOLDERS AND PARTICIPATING SECURITIES TO FFO (b) AND AFFO (b) |
||||||||
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities |
$ 43,500 |
$ 18,781 |
$ 73,802 |
$ 46,629 |
||||
Depreciation and Other Amortization of Real Estate |
28,707 |
28,323 |
113,126 |
111,371 |
||||
Depreciation and Other Amortization of Real Estate Included in Discontinued Operations |
- |
158 |
- |
2,388 |
||||
Impairment of Depreciated Real Estate |
- |
- |
626 |
- |
||||
Noncontrolling Interest |
1,706 |
758 |
2,903 |
1,895 |
||||
Equity in Depreciation and Other Amortization of Joint Ventures (a) |
- |
26 |
17 |
117 |
||||
Non-NAREIT Compliant Gain (b) |
(31,012) |
(11,505) |
(44,022) |
(25,988) |
||||
Non-NAREIT Compliant Gain from Joint Ventures (a) (b) |
- |
- |
(63) |
(3,346) |
||||
Funds From Operations (NAREIT) ("FFO") (b) |
$ 42,901 |
$ 36,541 |
$ 146,389 |
$ 133,066 |
||||
Loss from Retirement of Debt |
- |
- |
- |
655 |
||||
Restricted Stock/Unit Amortization |
1,603 |
1,357 |
7,177 |
7,605 |
||||
Amortization of Debt Discounts / (Premiums) and Hedge Costs |
148 |
148 |
592 |
2,072 |
||||
Amortization of Deferred Financing Costs |
868 |
738 |
3,159 |
3,098 |
||||
Depreciation of Corporate FF&E |
168 |
138 |
688 |
526 |
||||
Redemption of Preferred Stock |
- |
- |
- |
1,462 |
||||
Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements |
- |
- |
11,546 |
- |
||||
NAREIT Compliant (Gain) Loss (b) |
(4,810) |
83 |
(4,884) |
83 |
||||
One-Time Restoration Fee (c) |
- |
(402) |
- |
(2,638) |
||||
Non-Incremental Capital Expenditures (c) |
(12,817) |
(15,455) |
(43,380) |
(47,168) |
||||
Capitalized Interest and Overhead |
(866) |
(432) |
(2,718) |
(1,637) |
||||
Straight-Line Rent, Amortization of Above (Below) Market Leases and Lease Inducements |
(765) |
(1,403) |
(5,795) |
(2,576) |
||||
Adjusted Funds From Operations ("AFFO") (b) |
$ 26,430 |
$ 21,313 |
$ 112,774 |
$ 94,548 |
FIRST INDUSTRIAL REALTY TRUST, INC. |
||||||||
Selected Financial Data |
||||||||
(Unaudited) |
||||||||
(In thousands except per share/Unit data) |
||||||||
RECONCILIATION OF NET INCOME AVAILABLE TO FIRST INDUSTRIAL REALTY TRUST, INC.'S COMMON STOCKHOLDERS AND PARTICIPATING SECURITIES TO EBITDA (b) AND NOI (b) |
Three Months Ended |
Twelve Months Ended |
||||||
December 31, |
December 31, |
December 31, |
December 31, |
|||||
2015 |
2014 |
2015 |
2014 |
|||||
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities |
$ 43,500 |
$ 18,781 |
$ 73,802 |
$ 46,629 |
||||
Interest Expense |
17,745 |
16,886 |
67,424 |
72,178 |
||||
Depreciation and Other Amortization of Real Estate |
28,707 |
28,323 |
113,126 |
111,371 |
||||
Depreciation and Other Amortization of Real Estate Included in Discontinued Operations |
- |
158 |
- |
2,388 |
||||
Impairment of Depreciated Real Estate |
- |
- |
626 |
- |
||||
Preferred Dividends |
- |
- |
- |
1,019 |
||||
Redemption of Preferred Stock |
- |
- |
- |
1,462 |
||||
Income Tax (Benefit) Provision |
(10) |
46 |
117 |
238 |
||||
Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements |
- |
- |
11,546 |
- |
||||
Noncontrolling Interest |
1,706 |
758 |
2,903 |
1,895 |
||||
Loss from Retirement of Debt |
- |
- |
- |
655 |
||||
Amortization of Deferred Financing Costs |
868 |
738 |
3,159 |
3,098 |
||||
Depreciation of Corporate FF&E |
168 |
138 |
688 |
526 |
||||
Equity in Depreciation and Other Amortization of Joint Ventures (a) |
- |
26 |
17 |
117 |
||||
NAREIT Compliant (Gain) Loss (b) |
(4,810) |
83 |
(4,884) |
83 |
||||
Non-NAREIT Compliant Gain (b) |
(31,012) |
(11,505) |
(44,022) |
(25,988) |
||||
Non-NAREIT Compliant Gain from Joint Ventures (a) (b) |
- |
- |
(63) |
(3,346) |
||||
EBITDA (b) |
$ 56,862 |
$ 54,432 |
$ 224,439 |
$ 212,325 |
||||
General and Administrative |
6,336 |
5,476 |
25,362 |
23,418 |
||||
Acquisition Costs |
1,039 |
849 |
1,403 |
960 |
||||
FFO from Joint Ventures (b) |
6 |
(27) |
(73) |
(406) |
||||
Net Operating Income ("NOI") (b) |
$ 64,243 |
$ 60,730 |
$ 251,131 |
$ 236,297 |
||||
Weighted Avg. Number of Shares/Units Outstanding - Basic |
114,722 |
114,512 |
114,709 |
114,388 |
||||
Weighted Avg. Number of Shares Outstanding - Basic |
110,392 |
110,118 |
110,352 |
109,922 |
||||
Weighted Avg. Number of Shares/Units Outstanding - Diluted |
115,246 |
114,799 |
115,138 |
114,791 |
||||
Weighted Avg. Number of Shares Outstanding - Diluted |
110,916 |
110,405 |
110,781 |
110,325 |
||||
Per Share/Unit Data: |
||||||||
FFO (NAREIT) |
$ 42,901 |
$ 36,541 |
$ 146,389 |
$ 133,066 |
||||
Less: Allocation to Participating Securities |
(145) |
(147) |
(473) |
(479) |
||||
FFO (NAREIT) Allocable to Common Stockholders and Unitholders |
$ 42,756 |
$ 36,394 |
$ 145,916 |
$ 132,587 |
||||
Basic/Diluted Per Share/Unit |
$ 0.37 |
$ 0.32 |
$ 1.27 |
$ 1.16 |
||||
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities |
$ 43,500 |
$ 18,781 |
$ 73,802 |
$ 46,629 |
||||
Less: Allocation to Participating Securities |
(153) |
(79) |
(248) |
(175) |
||||
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders |
$ 43,347 |
$ 18,702 |
$ 73,554 |
$ 46,454 |
||||
Basic Per Share |
$ 0.39 |
$ 0.17 |
$ 0.67 |
$ 0.42 |
||||
Diluted Per Share |
$ 0.39 |
$ 0.17 |
$ 0.66 |
$ 0.42 |
||||
Common Dividends/Distributions Per Share/Unit |
$ 0.1275 |
$ 0.1025 |
$ 0.5100 |
$ 0.4100 |
||||
Balance Sheet Data (end of period): |
||||||||
Gross Real Estate Investment |
$ 3,293,968 |
$ 3,183,369 |
||||||
Real Estate Held For Sale, Net |
2,510 |
- |
||||||
Total Assets |
2,718,051 |
2,581,995 |
||||||
Debt |
1,442,411 |
1,349,846 |
||||||
Total Liabilities |
1,602,916 |
1,491,168 |
||||||
Total Equity |
$ 1,115,135 |
$ 1,090,827 |
a) Represents the Company's pro rata share of net income (loss), depreciation and amortization on real estate and non-NAREIT compliant gain (loss), if applicable.
b) Investors in, and analysts following, the real estate industry utilize funds from operations ("FFO"), net operating income ("NOI"), EBITDA and adjusted funds from operations ("AFFO"), variously defined below, as supplemental performance measures. While the Company believes net income available to
As used herein, the Company calculates FFO to be equal to net income available to
NOI is defined as revenues of the Company, minus property expenses such as real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses. NOI includes NOI from discontinued operations.
EBITDA is defined as NOI plus the equity in FFO of the Company's joint ventures, which are accounted for under the equity method of accounting, minus general and administrative expenses and acquisition costs. EBITDA includes EBITDA from discontinued operations.
AFFO is defined as EBITDA minus GAAP interest expense, minus capitalized interest and overhead, plus amortization of debt discounts / (premiums) and hedge costs, minus preferred stock dividends, minus straight-line rental income, amortization of above (below) market leases and lease inducements, minus provision for income taxes or plus benefit for income taxes, plus restricted stock amortization, minus non-incremental capital expenditures. Non-incremental capital expenditures are building improvements and leasing costs required to maintain current revenues. A one-time 2014 restoration fee was excluded from both EBITDA and non-incremental capital expenditures for purposes of calculating AFFO.
FFO, NOI, EBITDA and AFFO do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. FFO, NOI, EBITDA and AFFO should not be considered as substitutes for net income available to common stockholders and participating securities (calculated in accordance with GAAP) as a measure of results of operations or cash flows (calculated in accordance with GAAP) as a measure of liquidity. FFO, NOI, EBITDA and AFFO as currently calculated by the Company may not be comparable to similarly titled, but variously calculated, measures of other REITs.
In addition, the Company considers cash-basis same store NOI ("SS NOI") to be a useful supplemental measure of its operating performance. Same store properties, for the period beginning
c) A one-time 2014 restoration fee is excluded from the calculation of AFFO. The adjustment also reduced building improvements by
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SOURCE
Art Harmon, Vice President, Investor Relations and Marketing, 312-344-4320